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Wednesday, 21 November 2012

The Chinese Luxury Market, puppet-master.

Due to my studies I will to have to be more immersed into the business of the Fashion, great timing I was following a bit more the market since the fall of Aquascutum in Chineses's hands (for £15 million). At the beginning of this new term companies are publishing their results in sales and trends on the last semester and for the upcoming semester. We are glad to hear that the luxury market is going well, to 1 to 52.2% (cf. Reuters) for Michael Kors it was not really expected (such a good wealth) in those dark times. But if we look more closely where those sales come from? They come form Asia, China upon all.

China, well as you know China is the biggest market on Earth, every luxury brands have their biggest benefits from this country, but since a simple picture which made a horde of Chinese bloggers writing about the ire on their blog, the government took some directive - crackdown, from the China Daily :

Therefore if the thousands gifts (because you can buy a gift for another person in China within a budget, but this gift is in a certain way like to say thank you or welcome to an international customers/business man/partner/... but some people are/were abusing) made each year with the government's money will be forbidden (at least), inevitably the demand will slow down, obviously the market could fall but there will be no-breakdown but it could affect seriously the market in China. Burberry and Prada (two of the favourites designers brand of the Chinese people) are both showing some slowing down results from China for this end of the year contrasting with the results expected (even if Prada was the last one standing on the "growth boat") - Burberry has just signed for a new shop in Hong Kong on Russell Street for £624k a month of property. But HK, which is now the most expensive city for retailers, still a different place and need to be considered on its own but it shows the expectation made by group to increase their sales in this area.

Through this recession (yes even in China, proud to own 40% of the world debt) the Chinese, now, are considering to buy discount and second-hand clothes and accessories, outlet village are becoming more important as they are in Europe. So I am not saying that China is not a juicy market anymore, on the contrary it remains a wonderful business with a luxury blazing market - but it would be wise to be careful about trends, everything could happen.